I’ve noticed that a lot of the freshman year honors classes have much higher average grades (according to the IU grade distribution site) than their regular counterparts. Do people take a lot of honors classes/ is there a downside to doing so?
It depends on the class. Some honors classes are harder and have significantly more work, but others are actually easier to do well. If you have any questions about specific classes, I can try to answer them. I recommend taking K204 and C106 because these classes are pretty similar to the regular ones, but your group will probably be better, leading to a better grade on group assignments. Honors accounting classes are good too because they are graded on a generous curve, which almost guarantees you will get at least a B.
However, some classes like C205 and K304 are significantly harder than the regular versions. When I use the grade distribution database, I mainly look at the difference between class GPA and the GPA of the students taking the class. Most honors classes have better grades primarily because better students take the classes. Some honors classes are still worth taking though.